Local experts advise on estate planning, tax changes, and charitable giving

LEAVENWORTH — Recent changes to state and federal tax laws underscore the importance of reviewing estate plans, local experts advised during a Sept. 11 community meeting.

The event, led by attorneys Evan McCauley of Jeffers, Danielson, Sonn & Aylward and Caitlyn Evans of Evans Law, PLLC, along with Beth Stipe, Executive Director of the Community Foundation of NCW, covered estate planning basics, tax law changes, and ways charitable giving can reduce taxes while supporting causes.

McCauley and Evans stressed that planning goes beyond dividing assets, noting it can include appointing guardians for minors, establishing powers of attorney, providing health care directives, and preparing for long-term care. Plans should be started early, revisited during major life changes, such as marriage, divorce and children, and updated as assets change. They also emphasized the importance of disclosing all types of assets to their estate planning professionals, as well as naming alternate executors.

Beyond these personal considerations, the attorneys also outlined how recent shifts in federal tax law could significantly affect estate planning.

In July, the One Big Beautiful Bill Act permanently raised the federal estate tax exemption from $13.99 million to $15 million per person, or $30 million for couples, while keeping the top tax rate at 40 percent. The change is significant, as the exemption had been set to drop to around $7 million on Jan. 1, 2026.

This year, Washington State increased the capital gains tax from 7 percent to 9.9 percent, which can be triggered if appreciated assets are gifted during life. Instead, McCauley recommends holding these assets until after death to take advantage of the ‘step-up in basis,’ which resets the asset’s value for tax purposes at the time of inheritance.

Additionally, the state estate tax exemption was increased from $2.2 to $3 million. However, it also increased the graduated tax rates for amounts over $3 million.

“When we talk about taxable estate…That is everything you own or comes into your possession at your death. For example, some people forget to think about life insurance policies…Same thing with retirement accounts, bank accounts, investment accounts, [or] cars,” said Evans.

Evans explained that couples can take advantage of strategies such as portability and marital exclusions to maximize estate tax exemptions. For example, a credit shelter trust can be established upon the first spouse’s death. She noted that various types of wills and trusts can help minimize tax burdens, particularly when they incorporate charitable giving.

Evans illustrated this with an example: a $4 million estate exceeding a $3 million exemption by $1 million would owe $100,000 in taxes. By including a $500,000 charitable gift in the plan, the taxable amount could be reduced by half, resulting in $50,000 in tax savings

“One of the things that I think is really important is [asking], what is it that you want to accomplish with your charitable resources as part of your estate plan? What's important to you? What's brought you joy? What would you like to see future generations have and be able to support?,” said Stipe.

Stipe suggested that some assets can be better leveraged than others, such as tax-deferred accounts like individual retirement accounts (IRAs). Normally, distributions from an IRA are taxable to heirs, but if donated directly to a charitable organization, those taxes can be avoided. She emphasized the importance of consulting a professional advisor to ensure the right asset is directed to the right cause.

The event was co-hosted by the Community Foundation of NCW, Upper Valley MEND, and the Wenatchee River Institute. The Community Foundation of NCW, which helps individuals, families, businesses, and agencies support charitable causes throughout Chelan, Douglas, and Okanogan counties, has a number of legacy planning examples listed on its website.

Taylor Caldwell: 509-433-7276 or taylor@ward.media